By Rob Colville on June 3, 2016 in
Whenever asked about the “secret” to becoming a successful trader, many professionals will reference getting a good trading education first. Sounds simple, doesn’t it, but how can you actually control the quality of the trading education you receive?
Some aspiring traders naturally assume that getting a quality trading education requires reading every trading book they can get their hands on; being a student of every pattern, set-up, and indicator in existence; or spending thousands to acquire and learn to use the trading software, systems, and methodologies with the most amount of hype behind them. And perhaps this is why the vast majority of students are overwhelmed during the trading education phase, and never go on to become long-lasting, successful traders.
My advice: Learn to be a great student first, and you’ll more naturally evolve into a fine trader as a result. Do so by making the three (3) concepts we’ll discuss here today—open-mindedness, focus, and commitment—pillars of how you view and approach your own, unique trading education. You’ll feel more in control of your experience for it, and most of all, you’ll achieve better—and faster—results than you ever would while following those same, misguided ways that tend to trip up so many of your fellow traders.
In trading, as in life, “You don’t know what you don’t know,” and in large part, that’s what trading education is all about. However, traders who come in closed-minded, or perhaps too confident that they know more than they really do, or even those who think they already know what style and trading methodology is right for them, tend to limit their capacity for learning before the process even starts.
For example, what if there’s a better or simpler analysis technique, or more favourable markets or currency pairs, longer-term time frames, or higher-probability set-ups that will work with your methodology? Being open minded can help you hone into them and get on a proper path much sooner in your trading…but that’s only if you’re ready and willing to adopt what you learn!
As a result, ask yourself “Am I willing and prepared to explore different ideas, and if needed, will I put pride aside and admit any problems and/or flaws in myself and my current methods?”
Because some traders have experienced success in their life and/or profession before gravitating towards trading, it can be difficult for them to admit that they’re newbies all over again. That’s why it’s important to come in humble, and be realistic about your skill level while pursuing your trading education, and this is an excellent first step even before any real education takes place.
Especially early on in your trading education, it seems there’s a whole world of information out there just waiting to be soaked up. And that’s probably why so many traders fall into the trap of trying to do too much, too soon. So just like you never start a trading day without direction and purpose, you shouldn’t approach trading education that way, either.
Instead, identify only one or a couple items where you’ll direct your focus initially, with the goal of becoming a master and being able to effectively put those items into practice before moving on to add new disciplines, set-ups, and trading skills to your arsenal. Perhaps you’ll begin with a basic trend set-up like the pin bar reversal, or learn to trade Fibonacci retracements, and study only those at first. In addition, learning to trade on higher time frames like the daily and weekly first can be much more forgiving than trying to cut your teeth intraday.
For too many aspiring traders, the problems begin when they set out to learn technical analysis, plus a whole range of patterns and indicators at the same time. Throw in different entry and exit signals, risk management techniques, and more, and it quickly becomes overwhelming. And the kicker? The more information you try to learn at once, the less likely you are to retain it, anyway!
The takeaway here: Be highly focused in what you learn, try to become a master of one or a couple very specific things, and don’t try to learn a little about a lot. The best traders in the world aren’t out there trying to become a “Jack of all trades,” and you don’t have to learn to be one, either.
The very advice, “Get a good trading education first” almost implies that at some point, education stops and the trading career begins, and yet that’s not how it should be. In the markets, every trade and every day is a learning experience all their own, and traders should forever remain thirsty for knowledge and information.
Even professional traders stand to improve and work accordingly, striving to turn admitted weaknesses into strengths. So consider your trading education a permanent work in progress, and even years into the future, when trading feels much more controlled and comfortable for you than it likely does now, continue to go in search of newfound knowledge and trading skills.
Use your trade journal and the continuous lessons it will contain; attend trading workshops and conferences; and even consider direct mentoring for trading education that will last a lifetime, no matter how proficient you become!
For new and aspiring traders, and even more established ones, access a complete library of trading lessons and videos, up-to-the-present market analysis and trade ideas, continuing education, and even personalized, one-on-one mentoring when you join The Lazy Trader member’s community. For complete program details and benefits, please click the link below and find out how to get started today!